The Minnesota State Board of Investments, St. Paul, is searching for emerging managers. The sizes of the mandates and number of managers have not been determined. The $39 billion defined benefit plan now has $540 million invested with seven emerging managers. The search is being conducted internally.
Metropolitan Utilities District of Omaha (Neb.) Retirement Plan is conducting searches for new small-cap growth, small-cap value and international equity managers. The $200 million plan will give an undetermined amount to the new small-cap managers, said Ronald Bucher, assistant general manager of administration. The international manager will receive $20 million. Selected small-cap managers will be announced later this summer. The international manager will be hired sometime after that. Interested firms should contact consultant DeMarche.
New Mexico Public Employees' Retirement Association, Santa Fe, will start a search for a domestic equity index manager in June. Deutsche Asset Management's four-year contract as manager of an S&P 500 index portfolio and a Russell 1000 growth index portfolio, each with $650 million, will expire in September, said Robert Gish, executive director. The $8 billion pension fund is sending out an open RFP to managers capable of managing passive portfolios based on more than one index. It intends to hire one firm capable of managing more than the current portfolios. Deutsche can re-bid. RFPs will be due back in early July. Callan is assisting.
Pensioenfonds PGGM, Zeist, Netherlands, is considering ways to invest up to 5% of its total assets in commodities. The 111.3 billion guilder ($45.6 billion) system also plans to increase its holdings of private equity to roughly 7.5% of fund assets, from the current 5%. Both positions would be funded by cutting the plan's exposure to fixed income to 13% from the current 15% and reducing its exchange-traded equity holdings by five percentage points to 45%, said Niels Kortleve, head of investment policy. The commodity portfolio benchmark is expected to be the Goldman Sachs Commodity index. The plan has not decided whether to manage the portfolio in-house, invest directly in index futures or use a total return swap with an outside investment manager, Mr. Kortleve said. A decision is likely within the next two months.
The Indiana Public Employees' Retirement Fund, Indianapolis, is considering allocations to private equity and real estate. The $10.5 billion plan completed an asset-liability study, resulting in a new target asset allocation. In the new mix, the plan could invest up to 2% of total assets in private equity and 3% in real estate, said William Butler, executive director. In addition, the plan's target allocation to domestic equity will rise to 55% from 50%. The fixed-income allocation will drop to 35% from 40%. The 10% allocation to international equity will remain. Mr. Butler added searches for new managers would not begin before the third quarter. Funding for private equity and real estate would come from the plan's domestic equity and fixed-income portfolios, respectively. Mercer assisted with the study.
The California Public Employees' Retirement System, Sacramento, plans to adopt criteria for its upcoming search for a global custodian and issue a pre-search RFP to determine the universe of banks capable of handling the system's $175 billion in assets. Current custodian State Street Bank's contract expires June 30, 2001. At its May 15 meeting, the fund also will set a time frame for its RFP and plans to delegate final selection of the custodian to the chief investment officer. R.V. Kuhns is the consultant.
Everett (Mass.) Retirement Board suspended a search for its first real estate manager until after it completes a sale of $50 million in pension obligation bonds, which will increase the $55 million system's assets to $100 million, said Robert Shaw, executive director. "Then we would have a $5 million allocation to real estate instead of $2.5 million and would need two real estate managers instead of one," Mr. Shaw explained. "We would rather do the search after the new money comes into the system, so we don't have to do two searches." The date for completing the bond sale has not been set. The system has received state approval for selling the bonds, but interest rates got too high to make it worthwhile, Mr. Shaw said. Once the rates drop a little, the system will move forward.